New Delhi: The Income Tax department is said to be mulling prosecution against the HSBC bank for allegedly being the conduit for Indians in stashing money abroad.

The department, which had received more than 700 names in a list of black money account holders in HSBC bank in Geneva reportedly provided by the French government, has approached the Central Board of Direct Taxes (CBDT) in this regard, sources said.

The I-T department is believed to have recommended that action may be initiated against the bank under the provisions of Income Tax Act relating to abetment of false income tax returns, concealment of income to thwart tax recovery, sources said.

The department, which is set to begin prosecution of cases against a certain number of account holders on this list, has sent a communication in this regard to the CBDT.

When contacted, HSBC officials refused to comment.

The CBDT, the sources said, has now asked for an opinion from both the Law and External Affairs Ministry pertaining to the possible action against the bank.

Various investigation and enforcement units of the I-T across the country, where these names were sent for verification and realisation of unpaid taxes, have come together to state that the deposits in the HSBC Geneva accounts were allegedly made through the bank branches in India and this was hidden from the tax authorities.

The I-T department is of the view that the onus of declaring overseas accounts is not just on the account holder but also on the banks.

The department feels that the banks, including foreign ones, have an obligation under financial laws to submit Cash Transaction Reports (CTRs) and Suspicious Transaction Reports (STRs) to the Financial Intelligence Unit, and the HSBC Geneva deposits and withdrawls were not reported under this arrangement.

Finance Minister Pranab Mukherjee has earlier said that the government has received information from France about the overseas bank accounts of Indians.

"In 69 cases, the taxpayers have admitted to unaccounted income of Rs 397.17 crore. Taxes of Rs 30.07 crore have also been paid," he had said.

India, according to the Finance Ministry, has so far received over 9,900 pieces of information from several countries regarding suspicious transactions by Indian citizens, which are now under different stages of processing and investigation.